American Oil and Gas Reporter - June 2014 - 72

SpecialReport: Offshore & Subsea Technology
Financial Sweet Spot
He says Anadarko's Gulf strategy allows it to retain working
interests in the 25-40 percent range and to take advantage of its
strength as an operator. Anadarko has relied on innovative funding for capital requirements as part of its success in deep water,
he adds.
As part of a carried interest agreement on Lucius, Christiansen
says Anadarko conveyed a 7.2 percent working interest to INPEX
in exchange for $556 million, which represents 100 percent of
its expected capital obligation through first production.
"Through the carried interest agreement for Lucius, we sold down
our working interest, but it still kept us within our working interest sweet spot," he explains. "It also allowed us to accelerate some
of that value forward and cover our capital costs all the way through
first production, which enhances our rates of return. It's a great way
for us to manage our portfolio and bring the value forward, and also
to limit the financial risk on some of these projects."
Christiansen says a carried interest agreement for Heidelberg
garnered $860 million for almost all capital costs through first
oil in exchange for a 12.75 percent working interest.
"That is a good example of how important industry partnerships are for us," he comments. "They help manage the financial
risks, but also have that collaboration among different skill sets.
Everybody brings their own experiences and helps drive that project forward. That enhances our ability to move forward on a number of fronts."

Keep The Gulf Going
Hart says projects such as Lucius and Heidelberg will continue to dispel doubts about the Gulf's long-term viability as a lucrative producing basin.
"Lucius was one of the first subsalt Pliocene discoveries, and
there are a lot more subsalt Pliocene prospects to be tested," he
reflects. "But I think this helps us apply new technology. As we
get additional seismic processing, we can go into deeper waters.
The Gulf has been written off many times, but technology continues to advance, both on the exploration front and on the drilling
and completion front. That allows us to explore and develop these
resources in deeper water and higher pressure environments.
Consortiums with partners also will continue to be vitally important to the overall advancement in deepwater exploration and development, Lamey interjects, because of the substantial costs involved.
"You don't see many companies drilling wells out there with
100 percent working interests," he muses. "There also is a tremendous amount of technology that can be shared across the companies when you put together partnerships in which we all have
different experiences in the Gulf and in the international arena
that we can bring together to determine how best to go about
drilling the wells and exploring the resources. I think partnerships
are vital to our development in the Gulf of Mexico."
The Gulf also continues to contribute to Anadarko's global offshore effort through relationships with contractors that extend to
the executive level, offers Lamey. "That certainly helps us build

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American Oil and Gas Reporter - June 2014

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